A holiday house in Europe.
You’re well-travelled, well-heeled and have a special place in your heart for a certain country outside of Singapore. You’re considering a holiday home there, but what must you know before investing in one? Here are some important tips.
• Why fly to buy?
First of all, determine your purpose for having a holiday home. Do you intend to stay there yourself, lease it to others, or both? Depending on your intended use for it, different financial considerations must be taken into account. Getting your holiday home insured is the first step. A trusted property manager who will ensure the property is kept safe and in good order is important, especially if you want to rent the home out.
Leasing it also means you need to pay for cleaning and maintenance of the home. Remember that you will be subject to property tax, and any applicable rental income tax. Of course, there are also travel costs and currency fluctuations to consider; the latter affects the price of your holiday home.
• Research the restrictions
Most countries have restrictions on foreign property ownership. For instance, in northern Malaysia, foreigners can only buy properties that cost above RM1 million; in Selangor, this figure increases to RM2 million. In Thailand and the Philippines, foreigners cannot buy land or landed property, but can buy luxury condos in Bangkok and Manila.
In any case, be sure to avoid schemes promising to sidestep these restrictions via other types of ownership, such as property ownership under an incorporated company.
• A home for all seasons
If you have trouble deciding between a beachfront home in Bali and a remote villa in Provence, remember that the climate of the country where your holiday home is located will affect the insurance, cleaning and maintenance costs it incurs. A holiday home in a tropical country in Asia, for instance, is likely to cost less and be cheaper to maintain. It is also cheaper to travel to, compared to a holiday home in Europe.
While you may enjoy the cool Western European weather towards the end of the year, bear in mind that winter means your property is more high-maintenance. Gardening, tree-cutting, heating, changing the bedlinen and protecting any outdoor furniture you may have are all necessary to ensure your holiday home survives the winter, especially if you lease it out.
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This article was first published in the print version The PropertyGuru News & Views. Download PDF of full print issues or read more stories now! | ||